Florida Senate Advances Property Insurance Rewrite

Florida Senate Advances Property Insurance Rewrite

A committee of the Florida Senate has approved a revision of
state laws regulating homeowners’ insurance policies.
The package promises lower taxes as a result of the changes,
but likely means higher rates and reduced coverage now,
according to the Sarasota Herald-Tribune
(“
Insurance bills mean consumers pay more for less coverage).
“As property insurance lobbyists celebrated with
handshakes and back-slaps, the Republican-controlled
Legislature pushed forward Tuesday with legislation intended to
help Florida's struggling carriers, while offering consumers
higher rates, reduced hurricane coverage, limited rights to
challenge carriers and the public burden of paying for sinkhole
damage,” the paper reported.
Among the changes in the bill: a change in the name of
Florida’s state-backed insurer of last resort from
“Citizens Property Insurance” to
“Taxpayer Funded Property Insurance”
— a change that Senator J. D. Alexander, Republican
from Lake Wales, put forward because, he said,
“Lawmakers need to have some fun,” according
to the Orlando Sun Sentinel
(“
Sweeping property insurance package headed to full
Senate,” by Julie Patel).
In the event that Citizens could not afford to pay claims
after a major hurricane, deficits would be made up either by
borrowing on the bond market or by state-imposed fees applied
to commercial market-rate insurance policies.
“Citizens officials have warned their premiums aren't
high enough to cover all their payouts in the case of a huge
hurricane or series of storms,” reports the Bradenton
Herald
(“
Property insurance reform bill passes final Senate committee
with name change for Citizens by Janet Zink).
“That means all insurance policy holders, including
those that aren't in Citizens, would have to pick up the
tab.”
The bill also lets private insurers off the hook from a
requirement to offer coverage for sinkholes, a significant risk
for some Florida homes. Instead, however, Citizens (now to be
known as “Taxpayer Funded”) will have to
offer sinkhole coverage, reports the Miami Herald
(“
Property insurance reform bill gains steam,” by
Janet Zink).
Meanwhile, rates are immediately going to rise for some
Florida policyholders, reports the Miami Herald
(“
Florida approves 18 percent rate hike for State
Farm,” by Jeff Harrington). “The higher
rates, which are less than the 28 percent boost State Farm
sought, will take effect July 1 for new business and beginning
July 15 for renewals. Separately, Insurance Commissioner Kevin
McCarty approved a 62 percent increase for State
Farm’s commercial residential policies, which cover
homes that are owned by a person or business entity and rented
to others.”
Floridians already pay some of the highest property
insurance rates in the nation, reports the Sarasota
Herald-Tribune (“
Insurance rates weigh heavily on homeowners, “In
Monroe County, Florida regulators have approved private
insurance rates as high as $13,000 a year on a $150,000 house
-- more than a standard mortgage. Premiums elsewhere on the
coast, including in Sarasota County, have doubled and tripled
in the last five years.”